DailyPlay – Opening Trade (CSCO) Closing Trade (ACN) – December 12, 2023

Closing Trade

• ACN – 37.67% Loss: Buy to Close 1 Contract (or 100% of your Contracts) Jan 19th $335/$355 Call Vertical Spread @ $10.05 Debit. DailyPlay Portfolio: By Closing this Contract, we will pay $1,050. We initially opened this  Contract on Nov 29 @ $7.30 Credit. Our loss, therefore, is $275. 

CSCO Bullish Opening Trade Signal

View CSCO Trade

Strategy Details

Strategy: Long Call

Direction: Bullish

Details: Buy to Open 8 Contracts Jan 19th $47.50 Calls @ $2.29 Debit per contract.

Total Risk: This trade has a max risk of $1,832 (8 Contracts x $229) based on a hypothetical $100,000 portfolio risking 2%. We suggest using 2% of your portfolio value and divide it by $229 to select the # contracts for your portfolio.

Trend Continuation Signal: This is a bullish trade on a stock that is in a bullish trend.

1M/6M Trends: Neutral/Bearish

Relative Strength: 3/10

OptionsPlay Score: 93

Stop Loss: @ $1.15 Credit. (50% loss on premium paid)

Entering the Trade

Use the following details to enter the trade on your trading platform. Please note that whenever there is a multi-leg option strategy, it should be entered as a single trade. 

Please note that these prices are based on Monday’s closing prices. Should the underlying move significantly during the pre-market hours, we will likely adjust the strikes and prices to reflect a more accurate trade entry. 

Investment Rationale

After CSCO’s recent gap lower, price has found support near the $47 area and has recently made a move higher. This provides an opportunity to add to our existing CSCO trade to take advantage of a potential gap fill back to the $52 area. As such, we will be adding another 2% of the Jan 19th $$47.5 calls. We will also be closing our ACN trade early as yesterday’s price action saw a large move to the upside breaking above the $340 level and thus, invalidating our thesis for the trade. We will continue to monitor our DailyPlay positions carefully as this week has both a CPI data release as well as a Fed meeting which is expected to add significant volatility to markets. 

We will look to Buy the Jan 19th $47.50 Call @ $2.29 Debit. With a hypothetical portfolio of $100,000, we recommend risking 2% of the portfolio’s value to this trade, which is 8 Contracts for a risk of $1,832. We will set a stop loss on the Call at around 50% of the premium paid @ $1.15 Credit.

CSCO – Daily